by Gary Snyder
What could be more shameful and humiliating than to get caught stealing from your child’s piggy bank? Maybe the only thing worse is to have your children see you in court for stealing from his/her little league/soccer/ PTA piggy bank. Unfortunately it is happening with more frequency.
In a matter of days, several separate instances have been reported where parents were caught embezzling tens of thousands of dollars from league coffers. In Central California, a 43-year old mother and coach admitted to stealing $24,000 from the Turlock Youth Soccer League. At virtually the same time, in Michigan, the treasurer of the Livonia City Soccer Club stood mute at his arraignment for stealing over $100,000. In Washington, father and treasurer of the Spartan Baseball Club, a select baseball club for teenagers, was arrested and charged with embezzling over $21,000. In Pennsylvania, the treasurer took $12,000 from the coffers of the Coplay Sports in Allentown. In Wisconsin, the former president of the Green Bay Swim stole $47,000 over a three-year period (she had been serving a six-month jail sentence for a previous offense and also was convicted in 2001 of stealing $3,000). In Michigan, the treasurer of the Marine High School Booster Club was charged for stealing $35,000. In Ohio, the president of the Springdale Youth Boosters Inc. is charged with stealing $76000. In South Carolina, more than $13,000 was allegedly stolen by its vice president/treasurer from the Pinch Elementary School PTO. In most instances the boards were not aware of the illegal activity for about 3 years.
These are just a few examples of an exploding amount of criminality in which parents have access to substantial amounts of money with virtually no checks or balances. In preparation for an upcoming book, I have been able to document 60 instances in which over $350 million has taken from schools and programs. The children are not only being robbed of their opportunities, they are being robbed of their innocence by watching their own parents disappoint them.
Embarrassment does not seem to be a disincentive.
Want to receive the entire Nonprofit Imperative? Email gary.r.snyder@gmail.com
Showing posts with label nonprofit standards. Show all posts
Showing posts with label nonprofit standards. Show all posts
Monday, November 15, 2010
Thursday, November 11, 2010
Taking care of himself…through scare tactics
by Gary Snyder
gary.r.snyder@gmail.com
Steven Emerson raised $3,390,000 for his nonprofit, Investigative Project on Terrorism Foundation by telling donors they're in imminent danger from Muslims. He then dumped the money into his private, for-profit company. His management company, SAE Productions, received the $3.3 million. Emerson is the sole/employee/trustee/contractor for the nonprofit, according to the IRS 990 Form. It incorrectly states that the nonprofit did not delegate its management to a management company. The Form readily admits that that the board (solely Emerson) does not have to disclose conflicts of interest (even though the two entities, SAE and Investigative Project on Terrorism Foundation, share a Washington, D.C., address). "Basically," Ken Berger, president of the renowned Charity Navigator said, "you have a nonprofit acting as a front organization, and all that money going to a for-profit. It's wrong. It's off the charts."
gary.r.snyder@gmail.com
Steven Emerson raised $3,390,000 for his nonprofit, Investigative Project on Terrorism Foundation by telling donors they're in imminent danger from Muslims. He then dumped the money into his private, for-profit company. His management company, SAE Productions, received the $3.3 million. Emerson is the sole/employee/trustee/contractor for the nonprofit, according to the IRS 990 Form. It incorrectly states that the nonprofit did not delegate its management to a management company. The Form readily admits that that the board (solely Emerson) does not have to disclose conflicts of interest (even though the two entities, SAE and Investigative Project on Terrorism Foundation, share a Washington, D.C., address). "Basically," Ken Berger, president of the renowned Charity Navigator said, "you have a nonprofit acting as a front organization, and all that money going to a for-profit. It's wrong. It's off the charts."
Wednesday, July 22, 2009
Nonprofit Imperative
…. your nonprofit browser
June 2009
Join us on twitter: NonprofitsNews and ncrp blog (Ponzi effect on charities)
What’s Included:
Skunk of the Month
Illinois Funeral Directors Association
Nonprofit News-In Case You Missed It
Charitable Giving Down; Ronald Reagan Presidential Foundation; Shriners Hospital Cuts
Political/Official Chicanery
Association Exec Pleads Guilty; Detroit and Grand Rapids area Schools Sheriff/Police Officer
Comings and Goings
What Do You Think?
Skunk of the Month…
Skunk of the Month is the designation made by Nonprofit Imperative, the organization dedicated to eliminating waste, fraud, abuse and mismanagement in nonprofits and government. The Skunk of the Month award is given to charities and government officials who show blatant disregard for the interests and trust of contributors and taxpayers. This month’s example is:
Are Funeral Homes Meeting Their Maker?
Siren: For the past several months there has been a major problem brewing in Illinois. It has nothing to do with the Governor or his predecessor. It has nothing to do with a politicos’ indictment.
It has to do with one of the largest scams in recent nonprofit history.
It has gained the attention of every major public Illinois official one way or another. According to the secretary of state it was illegal. The Illinois Comptroller wants payback. The Illinois House wants an investigation. The state attorney general wants the perpetrators in court.
The backdrop: A Merrill Lynch employee sold life insurance policies to finance a pre-need funeral trust. He received a commission and provided investment advice on the proceeds that went to the Illinois Funeral Directors Association. An IFDA subsidiary took a piece of the premium for overseeing the trust and its cut exceeded the legally allowed amount. The trust had deficits of $10.4 million in 2001, $39 million in 2006 and as much as $100 million at the present time. The state comptroller wants $10 million to pay for current funerals. Merrill Lynch has offered $18 million to release them from liability and that is not acceptable to many funeral directors. The funeral homes say they are losing an estimated $500,000 each. The undertakers are crying foul and pointing to the failure of the regulators to do their job. There is much at stake including dignified burials for the 40,000 Illinois residents that bought the plans. (The State Journal-Register)
It seems that at least two other states have similar problems and solvency is a risk there as well.
Nonprofit News-
In Case You Missed It:
1. Charitable giving in the United States fell by 5.7 percent last year after adjustment for inflation, the largest year-over-year drop and the steepest decline in the history of the survey. The Giving USA Foundation began tracking American philanthropy 53 years ago. Individuals donated $229.3-billion last year, a decrease of 6.3 percent, accounting for 82 percent of all charitable giving in 2008. Corporate giving fell 8-percent, accounting for 5 percent of all giving. Foundation grants decreased only slightly, 0.8 percent representing 13 percent of the total contributed to charity last year. (WP/Chronicle of Philanthropy)
2. Despite a ban on gifts to lawmakers and limits on campaign contributions, lobbyists and groups that employ them can spend unlimited money to honor members of Congress or donate to nonprofits connected to them or their relatives. Most of the money — about $28 million — went to nonprofit groups, some with direct ties to members of Congress. (USA Today)
3. Investigations have focused on employees' activities involving child pornography possession, identity theft and embezzlement at the Library of Congress. The Library of Congress is charged by Senator Charles Grassley that it is attempting “to influence and/or control" the Office of Inspector General’s investigation. (WP)
4. A longtime Reagan foundation donor is seeking a court-ordered accounting of his contributions, unspecified compensatory damages, and $100,000 in legal fees over misuse of about $200,000 of his donations to the Ronald Reagan Presidential Foundation. (Ventura County Star)
5. The National D-Day Memorial Foundation, which runs the $25 million National D-Day Memorial, “is on the brink of financial ruin,” the AP stated. The foundation’s president insists the memorial’s only chance of survival is to be taken over by the National Park Service or by a college or university. (WSJ)
6. A former payroll manager for the Brooklyn Museum has been charged with stealing more than $620,000 from the nonprofit institution. (wcax.com)
7. A former pastor who once headed a Christian retreat in Hagerstown (MD) pleaded guilty for filing a false application to secure nonprofit status, bank fraud related to $1.75 million and tax evasion. (The Daily Record)
8. A federal judge sentenced a former Austin-based American Cancer Society employee to three years and four months in prison for embezzling over $200,000 from the non-profit organization.
9. Follow up: Fired amid an uproar over her $1.2 million pay package, the former executive sued the Central Carolinas United Way and six current or former officers in April. She accused them of race, age and gender discrimination, among other things, and asked the courts to give her more than $300,000 remaining on her contract, as well as the lucrative pension that prompted the public outcry. The matter was covered in great detail in NI. (charlotteobserver.com)
10. The Shriners hospital system is considering a plan to close six of its 22 hospitals around the country that care for children regardless of parents’ ability to pay. The nonprofit hospital system’s endowment lost more than $3-billion in the past year, which prompted consideration of the closure plan. The organization needs to cut spending by 30 percent. (CNNhealth.com)
11. The bookkeeper that stole $1 million from the Ann Arbor (MI) Amateur Hockey Association pleaded guilty to felony embezzlement. (Ann Arbor News)
12. No reference check: Even though she had two felony convictions in 2000 for food stamp fraud and obtaining aid for dependents, the City of Chattanooga hired Keele Maynor. Now the state is charging her with theft and fraud in addition to the federal charges of wire fraud. She pleaded guilty to federal charges after taking $80,000 by faking that she had cancer. (wrcbtv.com)
13. The second largest foundation in America, Ford Foundation, plans to trim its costs by offering buyouts to one-third of its 550 employees following an almost 30-percent drop in assets last year. (Chronicle of Philanthropy)
14. Two administrators with a New York nonprofit, SBCC Management Corp., that manages low-income housing spent $200,000 using the nonprofit's platinum card for meals, clothes and flight tickets to Puerto Rico for New York State Assembly members, according to a federal indictment filed. (Court House News Service/NYT)
15. The former accounting officer at the Firelake Grand Casino in Shawnee (OK) has been sentenced to nearly three years in prison for embezzling $406,000 from the Citizen Potawatomi Nation. (AP)
16. Remember NI covering the $590 million 2006 convictions and sentences of former Baptist Foundation of Arizona executives? The Arizona Court of Appeals upheld the executives’ conviction. Both were charged with of fraudulent investments and real estate transactions and operating the foundation as a Ponzi scheme.
We flagged these few examples of nonprofit mischief
1. Fowlerville (MI) Agricultural Society <$20,000 (livingstoncommunitynews.com)
2. Central Little League $11,996 (VA) (dailyprogress.com)
3. Great Lakes Energy electric cooperative (MI) $2 million (Gaylord Herald Times)
4. Genesee (MI) High School $4500 (Flint Journal)
5. Grove City Food Pantry and Emergency Services (OH) $50,000 (Columbus Dispatch)
6. Oh Day Aki/Heart of the Earth Charter School (MN) $1.38 million (StarTribune.com)
7. Conyers Public Housing Authority (GA) $130,000 (Portfolio.com)
8. Warrenwood Elementary Parent-Teacher Association (AR) $10000 (FayObserver.com)
9. West Virginia University's Student Dental Hygienist Association $4000 (Pittsburgh-Post Gazette)
10. Conn. Commission on Culture and Tourism $133,000 (wwlp.com)
11. Openhouse (CA) $20000 (The San Francisco Examiner)
12. Ranch Hope (NJ) $350,00 (nj.com)
13. Lexington Area Chamber of Commerce/Community Service Center Inc., (NB) $42,000 (kearneyhub.com)
14. Our Lady of the Sea (MI) <$90,000 (clickondetroit.com)
15. Children's Center at Highland United Methodist Church (NC) $150,000 (wral.com)
16. Brownsville General Hospital (PA) <$400,000 (Valley Independent)
17. Montana Synod of the Evangelical Lutheran Church $17,000 (kpvi.com)
18. Epping Cub Scout Pack 136 (NH) $5000 (seacoastonline.com)
19. Sacred Heart Catholic Church (KS) $74,000 (kfor.com)
20. Hawkins Elementary PTO (MI) >$20,000 (LivingstonDaily.com)
21. West Stanly Colt Club Boosters (NC) unknown (WCNC.com)
*update
Political/public official chicanery (just a few):
1. A former accountant has pleaded guilty to stealing more than $450,000 from the American Society for International Law from 2004 to 2008 and $150,000 from the American Bakers Association between 1998 and 2004.
2. CBS News has learned the FBI is investigating a little-known not-for-profit organization called Commonwealth Research Institute. Commonwealth gets the same benefits as any other charity: it doesn't have to pay taxes. But its line of work may be surprising. It's a defense contractor. If Commonwealth were not a charity, it could owe roughly one-third of its profits in taxes. That could add up to millions, on more than $45 million dollars in government contracts. (cbsnews.com)
3. VA authorities have charged four people in one of the largest embezzlement cases in Prince William County and are accused of creating a company in 2004 designed to bid for contracts from the county's information technology office, where they worked. Authorities say $9 million was sent to that company. (AP)
4. As a result of sloppy bookkeeping at 189 of 194 of the Detroit school buildings, the tax-exempt schools may have lost about $1.7 million that was wrongly paid in sales taxes, some of which could result in criminal charges. In addition, the audits showed loans made to school officials using school funds, missing funds from activities, school funds diverted to personal accounts, principals writing and signing checks, untimely deposits and money taken home by staff.
5. A Grand Rapids, (MI) grand jury returned a two-count indictment charging a former school superintendent of the Montcalm Area Intermediate School District (MAISD) with engaging in a conspiracy to accept a bribe--- $60,000 in free goods and services--- from a vendor. (U.S. Department of Justice)
6. A Paso Robles (CA) Police officer and board president of the California Organization of Police and Sheriffs (COPS) and the Civic Development Group (CDG), and the telemarketing firm COPS contracts with, is charged that they engage in “unlawful, unfair, and fraudulent business practices,” by the CA. attorney general. CDG received 85 percent of each donation and COPS retained less than 15 percent. In 2006, no COPS funds were used to help children. Of the $11.4 million in donations received in 2007, only $500 went to help children. (Cal Coast News)
7. The executive director for the Conyers (GA) Public Housing Authority pleaded guilty of embezzling more than $130,000 of housing authority funds.
8. Rep. Joe L. Barton's foundation is giving less than a quarter of the foundation's money to charitable causes, tax records show. The foundation spent more on staff, fundraising and other overhead from 2005 to 2007 - nearly $130,000 in all - than it did on its single $90,000 contribution to a charitable cause. The congressman's daughter-in-law runs the foundation as an unpaid executive director. The top Republican on the House Energy and Commerce Committee has raised donations from the industries his committee oversees. (Washington Times)
9. A former Skowhegan (ME) police officer received a nine-month suspended sentence for forging a document and his wife, a former school board member who was on probation for embezzlement when the forgery occurred, also had been found guilty. She had been convicted in 2004 of embezzling money from a nonprofit organization dedicated to developing and owning low-income housing in Cumberland County, had paid $30,000 in restitution to that group shortly before the forgery occurred.
10. Former head of Florida's sheriffs association was arrested for giving employees bonuses from federal homeland security grants and other sources — and requiring a kickback in return. He put a mistress on the county payroll for a highly paid, no-show job. He received at least $114,000 in kickbacks over the last few years. He pleaded guilty last month. (AP)
11. Former state legislator and city councilwoman Renee Gill Pratt entered a not guilty plea to racketeering charges. She stepped down from her administrative job with Southern University in New Orleans just before she was indicted in an alleged scheme to take hundreds of thousands of dollars in grant money intended for charity and education. (The Louisiana Weekly)
Charity Check Up
On paper it all seemed plausible. Robert D. Felner was well regarded. He had secured a $694,000 earmarked grant from the U.S. Department of Education to create an elaborate research center to help Kentucky's public schools. Three years later the money was almost depleted and the tasks in the proposal unaccomplished. With only $96,000 remaining in the account, he implored officials to approve a $200,000 subcontract with a nonprofit organization in Illinois that had already received $450,000 from the grant. The Illinois group, Mr. Felner said, had been surveying students and teachers in Kentucky.
In actuality, according to a story in the Chronicle of Higher Education, the National Center on Public Education and Prevention, was simply a shell that funneled money into the personal bank accounts of Mr. Felner and an associate. In addition, Felner and his associate allegedly tricked three school districts into sending their payments to their fraudulent Illinois organization, whose name was very similar to a reputable Rhode Island center. (In Rhode Island: the National Center on Public Education and Social Policy. In Illinois: the National Center on Public Education and Prevention.) The Illinois money then flowed into the two men's bank accounts, prosecutors say. Mr. Felner owns four houses whose combined value is more than $2-million.
Prosecutors say the two men siphoned away not only the $694,000 earmarked grant, but also $1.7-million in payments from urban school districts. Mr. Felner and his associate now await trial on charges of mail fraud, money laundering, and tax evasion.
Our take: Mr. Felner charged almost $37,000 of his salary against the grant; there is no evidence that he worked on the grant and no one looked.
Federal regulations require that universities use "suitable means of verification that the work was performed"; it took two years (and just months after a whistleblower tipped off the federal government) for the college of education's associate dean for research to declare that he knew of no reports, articles, or other products that resulted from the grant.
The university had a “blind eye” toward Felner’s management practices; many were impressed with U.S. News & World Report ranking that was attributed to Felner’s arrival, so they coddled him. The university paid little attention to the dozens of faculty and student grievances against Mr. Felner — and especially to a 2006 faculty vote of no confidence in his leadership
The university has learned lessons from that episode. Late last year the faculty senate was invited to overhaul the grievance system. The university's auditor reported to the Board of Trustees about a long list of university-wide accounting and research-compliance reforms that would be put into place.
On the other hand, many are still asking about how complaints about Mr. Felner had been handled by the university's president and others. Sounds a lot like this other agency.
What do you think??? : gary.r.snyder@gmail.com
Don’t miss Gary Snyder’s latest contribution to the National Committee on Responsive Philanthropy website (ncrp.org)
Nonprofit Imperative gathers its information solely from public documents...some of which are directly quoted. Virtually all cited are in some phase criminal proceedings; some have not been charged, however.
Recent (cites) Comings and Goings:
• Let the Crisis in Nonprofits Drive Change (ncrp.org)
• Are Charities Ignoring a Spike in Nonprofit Fraud? (Chronicle of Philanthropy)
• A Large Uptick In Charitable Fraud Is Met With A Yawn (ncrp.org)
• Funding Incompetence (ncrp.org)
• An Assault on Charities (ncrp.org)
• Nonprofit Hospitals Chase Debt (The Sun News)
• Is CEO Pay at Angel Food Ministries Excessive? (Atlanta Journal
Constitution)
• Five Rivers Outcome a Travesty (The Sun News)
• Where’s the Ire? (ncrp.org)
• A rags-to-riches life, with painful detours (Atlanta Journal Constitution)
• Five Rivers leaders guilty on six counts (The Sun News)
• Angel Food chief has led up-and-down life (Atlanta Journal Constitution)
• The Best Charitable Watchdog Going Kaput (ncrp.org)
• Five Rivers leaders guilty on six counts (The Sun News)
• Angel Food chief has led up-and-down life (Atlanta Journal Constitution)
• Our Students Deserve Better (ncrp.org)
• National Religious Broadcasters March 7,2009
• Siphoning Off Sacred Funds (ncrp.org)
• The Accountants and Regulators Role in the Current Collapse (ncrp.org)
• Veterans Whine as Executives Dine (ncrp.org)
• Government agency Monitoring: Indifference and Hush (ncrp.org)
• The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), Ethics World, Aspen Philanthropy Newsletter, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, Board Room Insider, USA Today Topics, Newsweek.com, Responsive Philanthropy Magazine, New York Times, Portfolio Magazine, The Virgin Islands Daily News, NANKAI (China) BUSINESS REVIEW, National Religious Broadcasters newsletter, The Charity Governance Blog, Palm Beach Post, Detroit Free Press, Oakland Press, Nonprofit World, Socially Responsible Business Forum, PNNOnline, Ohio Nonprofit Resources, Nonprofit Good Practice Guide, Nonprofit Startup Guide, Nonprofit Blog, National Coalition of Homeless Newsletter, The Michigan Nonprofit Management Manual, MichiganNonprofit.com, CORP! Magazine, Crain’s Michigan Nonprofit, ncrp.org,
• Nonprofits: On the Brink (iUniverse, 2006)
Our intent is to keep you informed.... You may send an e-mail that will remove you from our contact list and future mailings by emailing to nonprofitsonthebrink@gmail.com with the word "remove" in the subject line.
Email: gary.r.snyder@gmail.com :6584 Pleasant Lake Court, West Bloomfield, Michigan 48322, 248/324-3700; Website: www.garyrsnyder.com
Gary Snyder is the author of Nonprofits: On the Brink (iUniverse, February, 2006) and articles in numerous publications. The book can be bought at amazon.com, barnesandnoble.com, Barnes and Noble (store) and iUniverse.com (publisher).
© Gary R. Snyder, All Rights Reserved, 2009
June 2009
Join us on twitter: NonprofitsNews and ncrp blog (Ponzi effect on charities)
What’s Included:
Skunk of the Month
Illinois Funeral Directors Association
Nonprofit News-In Case You Missed It
Charitable Giving Down; Ronald Reagan Presidential Foundation; Shriners Hospital Cuts
Political/Official Chicanery
Association Exec Pleads Guilty; Detroit and Grand Rapids area Schools Sheriff/Police Officer
Comings and Goings
What Do You Think?
Skunk of the Month…
Skunk of the Month is the designation made by Nonprofit Imperative, the organization dedicated to eliminating waste, fraud, abuse and mismanagement in nonprofits and government. The Skunk of the Month award is given to charities and government officials who show blatant disregard for the interests and trust of contributors and taxpayers. This month’s example is:
Are Funeral Homes Meeting Their Maker?
Siren: For the past several months there has been a major problem brewing in Illinois. It has nothing to do with the Governor or his predecessor. It has nothing to do with a politicos’ indictment.
It has to do with one of the largest scams in recent nonprofit history.
It has gained the attention of every major public Illinois official one way or another. According to the secretary of state it was illegal. The Illinois Comptroller wants payback. The Illinois House wants an investigation. The state attorney general wants the perpetrators in court.
The backdrop: A Merrill Lynch employee sold life insurance policies to finance a pre-need funeral trust. He received a commission and provided investment advice on the proceeds that went to the Illinois Funeral Directors Association. An IFDA subsidiary took a piece of the premium for overseeing the trust and its cut exceeded the legally allowed amount. The trust had deficits of $10.4 million in 2001, $39 million in 2006 and as much as $100 million at the present time. The state comptroller wants $10 million to pay for current funerals. Merrill Lynch has offered $18 million to release them from liability and that is not acceptable to many funeral directors. The funeral homes say they are losing an estimated $500,000 each. The undertakers are crying foul and pointing to the failure of the regulators to do their job. There is much at stake including dignified burials for the 40,000 Illinois residents that bought the plans. (The State Journal-Register)
It seems that at least two other states have similar problems and solvency is a risk there as well.
Nonprofit News-
In Case You Missed It:
1. Charitable giving in the United States fell by 5.7 percent last year after adjustment for inflation, the largest year-over-year drop and the steepest decline in the history of the survey. The Giving USA Foundation began tracking American philanthropy 53 years ago. Individuals donated $229.3-billion last year, a decrease of 6.3 percent, accounting for 82 percent of all charitable giving in 2008. Corporate giving fell 8-percent, accounting for 5 percent of all giving. Foundation grants decreased only slightly, 0.8 percent representing 13 percent of the total contributed to charity last year. (WP/Chronicle of Philanthropy)
2. Despite a ban on gifts to lawmakers and limits on campaign contributions, lobbyists and groups that employ them can spend unlimited money to honor members of Congress or donate to nonprofits connected to them or their relatives. Most of the money — about $28 million — went to nonprofit groups, some with direct ties to members of Congress. (USA Today)
3. Investigations have focused on employees' activities involving child pornography possession, identity theft and embezzlement at the Library of Congress. The Library of Congress is charged by Senator Charles Grassley that it is attempting “to influence and/or control" the Office of Inspector General’s investigation. (WP)
4. A longtime Reagan foundation donor is seeking a court-ordered accounting of his contributions, unspecified compensatory damages, and $100,000 in legal fees over misuse of about $200,000 of his donations to the Ronald Reagan Presidential Foundation. (Ventura County Star)
5. The National D-Day Memorial Foundation, which runs the $25 million National D-Day Memorial, “is on the brink of financial ruin,” the AP stated. The foundation’s president insists the memorial’s only chance of survival is to be taken over by the National Park Service or by a college or university. (WSJ)
6. A former payroll manager for the Brooklyn Museum has been charged with stealing more than $620,000 from the nonprofit institution. (wcax.com)
7. A former pastor who once headed a Christian retreat in Hagerstown (MD) pleaded guilty for filing a false application to secure nonprofit status, bank fraud related to $1.75 million and tax evasion. (The Daily Record)
8. A federal judge sentenced a former Austin-based American Cancer Society employee to three years and four months in prison for embezzling over $200,000 from the non-profit organization.
9. Follow up: Fired amid an uproar over her $1.2 million pay package, the former executive sued the Central Carolinas United Way and six current or former officers in April. She accused them of race, age and gender discrimination, among other things, and asked the courts to give her more than $300,000 remaining on her contract, as well as the lucrative pension that prompted the public outcry. The matter was covered in great detail in NI. (charlotteobserver.com)
10. The Shriners hospital system is considering a plan to close six of its 22 hospitals around the country that care for children regardless of parents’ ability to pay. The nonprofit hospital system’s endowment lost more than $3-billion in the past year, which prompted consideration of the closure plan. The organization needs to cut spending by 30 percent. (CNNhealth.com)
11. The bookkeeper that stole $1 million from the Ann Arbor (MI) Amateur Hockey Association pleaded guilty to felony embezzlement. (Ann Arbor News)
12. No reference check: Even though she had two felony convictions in 2000 for food stamp fraud and obtaining aid for dependents, the City of Chattanooga hired Keele Maynor. Now the state is charging her with theft and fraud in addition to the federal charges of wire fraud. She pleaded guilty to federal charges after taking $80,000 by faking that she had cancer. (wrcbtv.com)
13. The second largest foundation in America, Ford Foundation, plans to trim its costs by offering buyouts to one-third of its 550 employees following an almost 30-percent drop in assets last year. (Chronicle of Philanthropy)
14. Two administrators with a New York nonprofit, SBCC Management Corp., that manages low-income housing spent $200,000 using the nonprofit's platinum card for meals, clothes and flight tickets to Puerto Rico for New York State Assembly members, according to a federal indictment filed. (Court House News Service/NYT)
15. The former accounting officer at the Firelake Grand Casino in Shawnee (OK) has been sentenced to nearly three years in prison for embezzling $406,000 from the Citizen Potawatomi Nation. (AP)
16. Remember NI covering the $590 million 2006 convictions and sentences of former Baptist Foundation of Arizona executives? The Arizona Court of Appeals upheld the executives’ conviction. Both were charged with of fraudulent investments and real estate transactions and operating the foundation as a Ponzi scheme.
We flagged these few examples of nonprofit mischief
1. Fowlerville (MI) Agricultural Society <$20,000 (livingstoncommunitynews.com)
2. Central Little League $11,996 (VA) (dailyprogress.com)
3. Great Lakes Energy electric cooperative (MI) $2 million (Gaylord Herald Times)
4. Genesee (MI) High School $4500 (Flint Journal)
5. Grove City Food Pantry and Emergency Services (OH) $50,000 (Columbus Dispatch)
6. Oh Day Aki/Heart of the Earth Charter School (MN) $1.38 million (StarTribune.com)
7. Conyers Public Housing Authority (GA) $130,000 (Portfolio.com)
8. Warrenwood Elementary Parent-Teacher Association (AR) $10000 (FayObserver.com)
9. West Virginia University's Student Dental Hygienist Association $4000 (Pittsburgh-Post Gazette)
10. Conn. Commission on Culture and Tourism $133,000 (wwlp.com)
11. Openhouse (CA) $20000 (The San Francisco Examiner)
12. Ranch Hope (NJ) $350,00 (nj.com)
13. Lexington Area Chamber of Commerce/Community Service Center Inc., (NB) $42,000 (kearneyhub.com)
14. Our Lady of the Sea (MI) <$90,000 (clickondetroit.com)
15. Children's Center at Highland United Methodist Church (NC) $150,000 (wral.com)
16. Brownsville General Hospital (PA) <$400,000 (Valley Independent)
17. Montana Synod of the Evangelical Lutheran Church $17,000 (kpvi.com)
18. Epping Cub Scout Pack 136 (NH) $5000 (seacoastonline.com)
19. Sacred Heart Catholic Church (KS) $74,000 (kfor.com)
20. Hawkins Elementary PTO (MI) >$20,000 (LivingstonDaily.com)
21. West Stanly Colt Club Boosters (NC) unknown (WCNC.com)
*update
Political/public official chicanery (just a few):
1. A former accountant has pleaded guilty to stealing more than $450,000 from the American Society for International Law from 2004 to 2008 and $150,000 from the American Bakers Association between 1998 and 2004.
2. CBS News has learned the FBI is investigating a little-known not-for-profit organization called Commonwealth Research Institute. Commonwealth gets the same benefits as any other charity: it doesn't have to pay taxes. But its line of work may be surprising. It's a defense contractor. If Commonwealth were not a charity, it could owe roughly one-third of its profits in taxes. That could add up to millions, on more than $45 million dollars in government contracts. (cbsnews.com)
3. VA authorities have charged four people in one of the largest embezzlement cases in Prince William County and are accused of creating a company in 2004 designed to bid for contracts from the county's information technology office, where they worked. Authorities say $9 million was sent to that company. (AP)
4. As a result of sloppy bookkeeping at 189 of 194 of the Detroit school buildings, the tax-exempt schools may have lost about $1.7 million that was wrongly paid in sales taxes, some of which could result in criminal charges. In addition, the audits showed loans made to school officials using school funds, missing funds from activities, school funds diverted to personal accounts, principals writing and signing checks, untimely deposits and money taken home by staff.
5. A Grand Rapids, (MI) grand jury returned a two-count indictment charging a former school superintendent of the Montcalm Area Intermediate School District (MAISD) with engaging in a conspiracy to accept a bribe--- $60,000 in free goods and services--- from a vendor. (U.S. Department of Justice)
6. A Paso Robles (CA) Police officer and board president of the California Organization of Police and Sheriffs (COPS) and the Civic Development Group (CDG), and the telemarketing firm COPS contracts with, is charged that they engage in “unlawful, unfair, and fraudulent business practices,” by the CA. attorney general. CDG received 85 percent of each donation and COPS retained less than 15 percent. In 2006, no COPS funds were used to help children. Of the $11.4 million in donations received in 2007, only $500 went to help children. (Cal Coast News)
7. The executive director for the Conyers (GA) Public Housing Authority pleaded guilty of embezzling more than $130,000 of housing authority funds.
8. Rep. Joe L. Barton's foundation is giving less than a quarter of the foundation's money to charitable causes, tax records show. The foundation spent more on staff, fundraising and other overhead from 2005 to 2007 - nearly $130,000 in all - than it did on its single $90,000 contribution to a charitable cause. The congressman's daughter-in-law runs the foundation as an unpaid executive director. The top Republican on the House Energy and Commerce Committee has raised donations from the industries his committee oversees. (Washington Times)
9. A former Skowhegan (ME) police officer received a nine-month suspended sentence for forging a document and his wife, a former school board member who was on probation for embezzlement when the forgery occurred, also had been found guilty. She had been convicted in 2004 of embezzling money from a nonprofit organization dedicated to developing and owning low-income housing in Cumberland County, had paid $30,000 in restitution to that group shortly before the forgery occurred.
10. Former head of Florida's sheriffs association was arrested for giving employees bonuses from federal homeland security grants and other sources — and requiring a kickback in return. He put a mistress on the county payroll for a highly paid, no-show job. He received at least $114,000 in kickbacks over the last few years. He pleaded guilty last month. (AP)
11. Former state legislator and city councilwoman Renee Gill Pratt entered a not guilty plea to racketeering charges. She stepped down from her administrative job with Southern University in New Orleans just before she was indicted in an alleged scheme to take hundreds of thousands of dollars in grant money intended for charity and education. (The Louisiana Weekly)
Charity Check Up
On paper it all seemed plausible. Robert D. Felner was well regarded. He had secured a $694,000 earmarked grant from the U.S. Department of Education to create an elaborate research center to help Kentucky's public schools. Three years later the money was almost depleted and the tasks in the proposal unaccomplished. With only $96,000 remaining in the account, he implored officials to approve a $200,000 subcontract with a nonprofit organization in Illinois that had already received $450,000 from the grant. The Illinois group, Mr. Felner said, had been surveying students and teachers in Kentucky.
In actuality, according to a story in the Chronicle of Higher Education, the National Center on Public Education and Prevention, was simply a shell that funneled money into the personal bank accounts of Mr. Felner and an associate. In addition, Felner and his associate allegedly tricked three school districts into sending their payments to their fraudulent Illinois organization, whose name was very similar to a reputable Rhode Island center. (In Rhode Island: the National Center on Public Education and Social Policy. In Illinois: the National Center on Public Education and Prevention.) The Illinois money then flowed into the two men's bank accounts, prosecutors say. Mr. Felner owns four houses whose combined value is more than $2-million.
Prosecutors say the two men siphoned away not only the $694,000 earmarked grant, but also $1.7-million in payments from urban school districts. Mr. Felner and his associate now await trial on charges of mail fraud, money laundering, and tax evasion.
Our take: Mr. Felner charged almost $37,000 of his salary against the grant; there is no evidence that he worked on the grant and no one looked.
Federal regulations require that universities use "suitable means of verification that the work was performed"; it took two years (and just months after a whistleblower tipped off the federal government) for the college of education's associate dean for research to declare that he knew of no reports, articles, or other products that resulted from the grant.
The university had a “blind eye” toward Felner’s management practices; many were impressed with U.S. News & World Report ranking that was attributed to Felner’s arrival, so they coddled him. The university paid little attention to the dozens of faculty and student grievances against Mr. Felner — and especially to a 2006 faculty vote of no confidence in his leadership
The university has learned lessons from that episode. Late last year the faculty senate was invited to overhaul the grievance system. The university's auditor reported to the Board of Trustees about a long list of university-wide accounting and research-compliance reforms that would be put into place.
On the other hand, many are still asking about how complaints about Mr. Felner had been handled by the university's president and others. Sounds a lot like this other agency.
What do you think??? : gary.r.snyder@gmail.com
Don’t miss Gary Snyder’s latest contribution to the National Committee on Responsive Philanthropy website (ncrp.org)
Nonprofit Imperative gathers its information solely from public documents...some of which are directly quoted. Virtually all cited are in some phase criminal proceedings; some have not been charged, however.
Recent (cites) Comings and Goings:
• Let the Crisis in Nonprofits Drive Change (ncrp.org)
• Are Charities Ignoring a Spike in Nonprofit Fraud? (Chronicle of Philanthropy)
• A Large Uptick In Charitable Fraud Is Met With A Yawn (ncrp.org)
• Funding Incompetence (ncrp.org)
• An Assault on Charities (ncrp.org)
• Nonprofit Hospitals Chase Debt (The Sun News)
• Is CEO Pay at Angel Food Ministries Excessive? (Atlanta Journal
Constitution)
• Five Rivers Outcome a Travesty (The Sun News)
• Where’s the Ire? (ncrp.org)
• A rags-to-riches life, with painful detours (Atlanta Journal Constitution)
• Five Rivers leaders guilty on six counts (The Sun News)
• Angel Food chief has led up-and-down life (Atlanta Journal Constitution)
• The Best Charitable Watchdog Going Kaput (ncrp.org)
• Five Rivers leaders guilty on six counts (The Sun News)
• Angel Food chief has led up-and-down life (Atlanta Journal Constitution)
• Our Students Deserve Better (ncrp.org)
• National Religious Broadcasters March 7,2009
• Siphoning Off Sacred Funds (ncrp.org)
• The Accountants and Regulators Role in the Current Collapse (ncrp.org)
• Veterans Whine as Executives Dine (ncrp.org)
• Government agency Monitoring: Indifference and Hush (ncrp.org)
• The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), Ethics World, Aspen Philanthropy Newsletter, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, Board Room Insider, USA Today Topics, Newsweek.com, Responsive Philanthropy Magazine, New York Times, Portfolio Magazine, The Virgin Islands Daily News, NANKAI (China) BUSINESS REVIEW, National Religious Broadcasters newsletter, The Charity Governance Blog, Palm Beach Post, Detroit Free Press, Oakland Press, Nonprofit World, Socially Responsible Business Forum, PNNOnline, Ohio Nonprofit Resources, Nonprofit Good Practice Guide, Nonprofit Startup Guide, Nonprofit Blog, National Coalition of Homeless Newsletter, The Michigan Nonprofit Management Manual, MichiganNonprofit.com, CORP! Magazine, Crain’s Michigan Nonprofit, ncrp.org,
• Nonprofits: On the Brink (iUniverse, 2006)
Our intent is to keep you informed.... You may send an e-mail that will remove you from our contact list and future mailings by emailing to nonprofitsonthebrink@gmail.com with the word "remove" in the subject line.
Email: gary.r.snyder@gmail.com :6584 Pleasant Lake Court, West Bloomfield, Michigan 48322, 248/324-3700; Website: www.garyrsnyder.com
Gary Snyder is the author of Nonprofits: On the Brink (iUniverse, February, 2006) and articles in numerous publications. The book can be bought at amazon.com, barnesandnoble.com, Barnes and Noble (store) and iUniverse.com (publisher).
© Gary R. Snyder, All Rights Reserved, 2009
Wednesday, May 20, 2009
Nonprofit Imperative
…. your nonprofit browser
May 2009
Join us on twitter: NonprofitsNews and ncrp blog
"Well, you know what happens is, it starts out with you taking a little bit, maybe a few hundred, a few thousand. You get comfortable with that, and before you know it, it snowballs into something big." (Bernard Madoff’s secretary’s account)
What’s Included:
Skunk of the Month
Genesis Family Center; Speaker of House in FL.; Maricopa Com. College
Nonprofit News-In Case You Missed It
Cheating the Blind; Obama Promoting National service; Obama Wants Restricted Nonprofit Lobbying
Political/Official Chicanery
Congressman cheated campaigns; Sheriff; N.Y. Federal Reserve Resigns
Comings and Goings
What Do You Think?
***the single biggest inquiry we have is… ‘where do you find these misdeeds?’ To the degree possible, we will cite our sources so that you can follow up on these seemingly astonishing (and sordid) tragedies. Enjoy!
Skunk of the Month…
Skunk of the Month is the designation made by Nonprofit Imperative, the organization dedicated to eliminating waste, fraud, abuse and mismanagement in nonprofits and government. The Skunk of the Month award is given to charities and government officials who show blatant disregard for the interests and trust of contributors and taxpayers. This month’s example is:
Update: In our last edition we shared with you the vagaries of Genesis Family Center and how the past chief executive violated her probation after pleading no contest and she was convicted of felony embezzlement and tax evasion. The county supervisors rejected a contract with the nonprofit citing questions about its troubled past. The county was its major donor. (ksee24.com) Update-2: The former executive director of the Genesis child welfare agency pleaded no contest to drunken driving and was given a jail sentence that runs concurrent with her violation of probation. (The Fresno Bee). Update-3: Upon being confronted by police the Genesis exec. directed an expletive-laced tirade at officers, ordering them off her property, according to the report. She also called a female officer a derogatory name, (The Fresno Bee).
This one has it all
He was elected speaker of the Florida House and then his house of cards started to collapse. Both he and his friend, the president of Northwest Florida State College face felony misconduct charges for allegedly misusing $6-million in state funds for a campus construction project. The speaker inserted the $6-million into the state budget in 2007 for what college officials had described as an emergency-management operations center. A grand jury believed that the money was to sublease a hangar adjacent to a private jet operation owned by a friend of the speaker and contributor, who has given millions of dollars to his and others campaigns. The newly elected speaker accepted an unadvertised $110,000-per-year job at the college. That position arose after the speaker had steered $35-million in construction funds to the college, according to The Miami Herald. When this broke the speaker stepped down as speaker and resigned his post at the college. The president of Northwest Florida since 1987 was also indicted for perjury for allegedly lying to jurors during his testimony on about plans for the building. (Chronicle of Higher Education). Northwest Florida College president is the "poster boy'' for abuse and "retired'' in 2007, collected a payment of $553,228 and started collecting a monthly pension of $8,803 to go with an annual salary of $228,000. (Tampabay.com) There is a call to the US Dept. of Ed & US Dept. of Justice to yank the accreditation of the College
Is a Third Strike an Out?
In order to provide nonprofits with retirement plans to their staff, Maricopa Community College District broke the law by misrepresenting at least 22 employees of non-profit organizations as district employees for years. The district paid their salaries and benefits and then accepted reimbursement. The audit of the college district marks the third time since 2006 that the state auditor has found that public entities misused public money by allowing non-profit organizations to get public-employee benefits. A 2006 audit of Santa Cruz County found the county improperly made loans to a non-profit corporation to cover the non-profit's payroll costs and allowed the employees to participate in the state retirement system. In 2007, state auditors found the Maricopa County Regional School District paid salaries and provided benefits to employees of a non-profit company.
Nonprofit News-
In Case You Missed It:
1. A mother and daughter who managed a D.C. government program aimed at employing blind vendors were indicted on charges of embezzling $281,000, much of which was supposed to be paid to the vendors, who were working at snack bars, cafeterias and gift shops in federal buildings. (Washington Post)
2. The Chief Financial Officer for Traveler’s Aid of Metropolitan Atlanta, a charitable organization that provides housing, support and assistance to homeless men, women and children in the Atlanta metropolitan area abused her position. She embezzled more than $164,000.00 of the charity’s funds and used that money for her own needs. (FBI Press Release)
3. An accounting director is expected to plead guilty to embezzling more than almost $600,000 from his former employers---American Society of International Law and the American Bakers Association. He is accused of embezzling about $445,000 from the law society and $145,000 from the bakers association. (washingtonexaminer.com)
4. In 2007, it’s believed she took $200,000 from a business, but no charges were filed. Now she is accused of embezzling more than $400,000 from the Hinton Economic Development Authority (OK) (newsok)
5. Using leads largely through the membership of the Church of Jesus Christ of Latter-day Saints in Lake Arrowhead, Terrance Tucker and Sonya Tucker are currently in custody for what federal prosecutors called a “mill scheme,” a scam that squeezed about $31 million from financial institutions and up to $2 million from individuals. A “mill” is a real-estate financing scheme in which they brokered real-estate loans by banks or other lenders, using fraudulent documents. (Mountain News)
6. The fired technology director for LifeGift Organ Donation Center pleaded guilty in Houston federal court to illegally accessing her employer’s computer and deleting files including organ donation database records. After being terminated, Danielle Duann, 51, repeatedly gained access to the LifeGift network and intentionally caused damage that cost the nonprofit Texas organ procurement group more than $94,000, officials said. A charity spokeswoman said the files were retrieved and no lives were put in jeopardy. (chron.com)
7. While posing as various charities --- including The Boys and Girls Club, Planned Parenthood, Teen Pregnancy Help Center, the YMCA, various domestic abuse shelters---the police investigated and arrested Norita Appleby. She will be charged with misappropriation of an Entity's Identifying Information, a class H felony. (wmtv.com)
8. A grand jury has indicted the Tucson Museum of Art's accountant with embezzling nearly $1 million. (examiner.com)
9. President Obama's budget for next year will include $50 million to help expand nonprofit programs across the country to promote national service
10. The Council on Foundations surveyed 430 foundations in March and found that 62 percent expect to reduce their grant making this year. Almost half of the respondents said they will decrease their giving budgets by more than 10 percent. (Chronicle of Philanthropy)
11. It appears that the Obama administration’s restrictions on lobbying are drawing criticism even as the administration defends the policies. The controversy surrounds two policy documents: one addresses restrictions on hiring lobbyists and others as political appointees, and the other focuses on communications by lobbyists about use of Recovery Act funds. (OMB Watch)
12. The IRS reminds small calendar year tax-exempt organizations to file their electronic Form 990-N, known as the "e-Postcard," by the May 15 deadline. To get more information about the annual electronic filing requirement for organizations whose annual gross receipts are normally $25,000 or less, go to IRS.gov.
13. Former Haven Humane Society CEO Norman Ray Ryan was convicted of five felonies in the embezzlement from the nonprofit group. (Redding.com)
14. A new study of the Bill and Melinda Gates Foundation illustrates its global reach with spending on health issues, but notes a need for accountability on whether the money is being spent in the most effective way.
15. The president and director of YouthBuild Pensacola Inc., was arrested on state charges of aggravated white-collar crime and organized fraud and theft of $65,000 mostly intended for small businesses participating in the program. He is a former executive director of the Gulf Coast African American Chamber of Commerce and former principal of the now-defunct Gulf Coast High School, which was a charter school. (pnj.com)
16. The Internal Revenue Service has added a detailed site map to its “Charities and Nonprofits” Web site to help visitors find what they are looking for. (Chron. Of Philanthropy)
We flagged these few examples of nonprofit mischief
1. St. Mary Magdalen Catholic Church (FL) $1 million (Orlando Sentinel)
2. Crow Creek Tribal School $6000 (S.D.) (Capital Journal)
3. Baldock Health Care Center in North Huntingdon, and Humbert Lane Nursing and Rehabilitation in Washington (PA) (Post Gazette)
4. Wellsville-Middleton School District (MO) $214,000 (wgem)
5. City of Springfield (MO) $750,000 (wgem)
6. Danville Harvest Jubilee (NC) $85,000 (Danville News)
7. Macon (GA) Waves $30,000 (macon.com)
8. University of St. Thomas (MN) $178,400 (bulletintoday)
9. Union Township (MI) unknown (themorningsun)
10. Options in Supported Living (CA) $225,000 (Sacramento Business Journal)
11. Central Maine Growth Council $29,000 (boston.com)
12. Christ Episcopal Church (VA) $300,000 (dailypress.com)
13. Association of Fish and Wildlife Agencies $180,000 (Washington Post)
14. Long Beach Unified School District/Long Beach Education Foundation $100,000 (mercurynews.com)
15. Memorial Christian Church thousands (wsls.com)
16. Colours $140,000 (courier-post)
17. Knights of Columbus (FL) $18,000 (news2.com)
18. A New Beginning (KS) $3.76 million (kake.com)
19. National Children's Alliance (MD) $15,800 (fox13now)
20. Coalition to End Family Violence (CA) $50,000 (Ventura County Star)
21. Tufts University (MA) $300,000 (The Tufts Daily)
22. Salford Township (PA) $95,000
23. Sioux Empire Fair (SD) $579,000 (ktiv.com)
24. Delaware Valley Regional High School District (NJ) $90,000 (AP)
25. Routt County Habitat for Humanity (CO) $75,000 (9news.com)
26. The Yuma Southwest Contractors Association (AZ) $15,000 (yumasun.com)
27. International Association of Machinists and Aerospace Workers District 9 (MO) $341,000 (St. Louis Business Journal)
28. Jubilee Restoration Inc (CA) $177,000 (cbs5.com)
29. The American Task Force on Palestine (VA) $107,000 (Washington Post)
*update
Political/public official chicanery (just a few):
1. A former political aide to Sen. Lindsey Graham (R-S.C.) will pay a civil penalty after embezzling hundreds of thousands of dollars from Graham's Senate campaign. In November 2008, Adams was sentenced to 18 months in prison and five years probation. She was also convicted of spending money from Graham's personal account. The campaign aide obtained a credit card in Graham's name sometime between 2006 and 2007. She had been convicted of fraud before. (The Hill)
2. The campaign manager for former Christopher Shays is being investigated by the Federal Election Commission, for significant financial irregularities. It is alleged that he quietly drained the account and had spent nearly $200,000 on Red Sox tickets, limousine travel, mysterious withdrawals at a casino and a donation of more than $1,000 to his synagogue. Mr. Shays said, “To lose an election is difficult; what happened since then is unimaginable.”
3. A former Okaloosa County (FL) Sheriff and former Okaloosa County Sheriff’s Office Director were indicted creating fictitious bonuses to sheriff’s department employees. The indictment alleges that Sheriff’s Office employees were directed to return all or a portion of the bonuses in the form of cash and cashier’s checks under the pretense that these returned funds were to be used for charitable purposes. (U.S. Attorney Press Release)
4. New York City’s longtime finance commissioner, Martha E. Stark, resigned amid a series of official inquiries. Ms. Stark faced new disclosures that she had been paid more than $134,000 in 2006 and 2007 for service as a board member of the Tarragon Corporation, a large housing builder and property owner not doing business in the city, a level of outside activity generally frowned upon by city regulations. Previously, it was reported that Ms. Stark was romantically involved with a former subordinate whose salary had risen sharply during the last three years she worked for the agency. She had decided to retain the husband of her first deputy commissioner as a parking ticket judge even though city investigators had found discrepancies in the time sheets submitted by the husband.
5. Two longtime supervisors at the Canyon County (WY) Division of Motor Vehicles are facing felony charges of grand theft of “a large” amount of money. (Localnews8.com)
6. They do not show up on staff rosters and touted belt-tightening, the California House and Senate leadership hired friends and close confidants to positions that totaled nearly a half a million dollars. (Sacramento Bee)
7. The chairman of the Federal Reserve Bank of New York resigned after questions were raised about his role as a director of Goldman Sachs and his purchases of stock in the company. This was after Goldman came under direct supervision of the New York Fed. He is representative of the too-cozy relationship between the New York Fed, which serves as the central bank's eyes and ears on Wall Street, and the bankers it oversees, critics say. (Washington Post)
8. Prosecutors are alleging that a 74-year-old spent $60,000 in public funds for personal use before retiring as Vernon (CA) city administrator five years ago. He reported a salary of more than $600,000 that had made him one of the state's highest paid city officials. (signonsandiego.com)
9. Former New York state senator has pleaded guilty to fraud charges, admitting that he used charity groups to steal hundreds of thousands of dollars. Efrain Gonzalez admitted that he siphoned the money away from charity groups that received state grants from $200 million the New York Legislature. (NYT) His gal friend admitted her role in Gonzalez's theft of $200,000 in public money, but as part of a plea deal with the feds, she faces a likely sentence of between four and 10 months in prison. (daily news)
10. Former Fresno (CA) County Deputy Coroner Joseph Tiger was sentenced to 18 months in jail and 5 years of probation, after pleading guilty to embezzlement charges. Tiger was accused of stealing from the dead. (ksee.com)
11. A former Water Operations Supervisor for the City of Sonoma, Calif., pleaded guilty to personally receiving financial payments from a parts vendor with whom he had arranged contracts for the City.
12. A Macomb County (MI) postal worker is charged with stealing more than $19,000 in stamps and selling them for discount online to help pay his mortgage was arraigned. (freep.com)
What do you think??? : gary.r.snyder@gmail.com
Don’t miss Gary Snyder’s latest contribution to the National Committee on Responsive Philanthropy website (ncrp.org)
Nonprofit Imperative gathers its information solely from public documents...some of which are directly quoted. Virtually all cited are in some phase criminal proceedings; some have not been charged, however.
Recent (cites) Comings and Goings:
• Funding Incompetence (ncrp.org)
• An Assault on Charities (ncrp.org)
• Nonprofit Hospitals Chase Debt (The Sun News)
• Is CEO Pay at Angel Food Ministries Excessive? (Atlanta Journal
Constitution)
• Five Rivers Outcome a Travesty (The Sun News)
• Where’s the Ire? (ncrp.org)
• A rags-to-riches life, with painful detours (Atlanta Journal Constitution)
• Five Rivers leaders guilty on six counts (The Sun News)
• Angel Food chief has led up-and-down life (Atlanta Journal Constitution)
• The Best Charitable Watchdog Going Kaput (ncrp.org)
• Five Rivers leaders guilty on six counts (The Sun News)
• Angel Food chief has led up-and-down life (Atlanta Journal Constitution)
• Our Students Deserve Better (ncrp.org)
• National Religious Broadcasters March 7,2009
• Siphoning Off Sacred Funds (ncrp.org)
• The Accountants and Regulators Role in the Current Collapse (ncrp.org)
• Veterans Whine as Executives Dine (ncrp.org)
• Government agency Monitoring: Indifference and Hush (ncrp.org)
• The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), Ethics World, Aspen Philanthropy Newsletter, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, Board Room Insider, USA Today Topics, Newsweek.com, Responsive Philanthropy Magazine, New York Times, Portfolio Magazine, The Virgin Islands Daily News, NANKAI (China) BUSINESS REVIEW, National Religious Broadcasters newsletter, The Charity Governance Blog, Palm Beach Post, Detroit Free Press, Oakland Press, Nonprofit World, Socially Responsible Business Forum, PNNOnline, Ohio Nonprofit Resources, Nonprofit Good Practice Guide, Nonprofit Startup Guide, National Coalition of Homeless Newsletter, The Michigan Nonprofit Management Manual, MichiganNonprofit.com, CORP! Magazine, Crain’s Michigan Nonprofit, ncrp.org,
• Nonprofits: On the Brink (iUniverse, 2006)
Our intent is to keep you informed.... You may send an e-mail that will remove you from our contact list and future mailings by emailing to nonprofitsonthebrink@gmail.com with the word "remove" in the subject line.
Email: gary.r.snyder@gmail.com
6584 Pleasant Lake Court, West Bloomfield, Michigan 48322, 248/324-3700
Website: www.garyrsnyder.com
Gary Snyder is the author of Nonprofits: On the Brink (iUniverse, February, 2006) and articles in numerous publications. The book can be bought at amazon.com, barnesandnoble.com, Barnes and Noble (store) and iUniverse.com (publisher).
© Gary R. Snyder, All Rights Reserved, 2009
May 2009
Join us on twitter: NonprofitsNews and ncrp blog
"Well, you know what happens is, it starts out with you taking a little bit, maybe a few hundred, a few thousand. You get comfortable with that, and before you know it, it snowballs into something big." (Bernard Madoff’s secretary’s account)
What’s Included:
Skunk of the Month
Genesis Family Center; Speaker of House in FL.; Maricopa Com. College
Nonprofit News-In Case You Missed It
Cheating the Blind; Obama Promoting National service; Obama Wants Restricted Nonprofit Lobbying
Political/Official Chicanery
Congressman cheated campaigns; Sheriff; N.Y. Federal Reserve Resigns
Comings and Goings
What Do You Think?
***the single biggest inquiry we have is… ‘where do you find these misdeeds?’ To the degree possible, we will cite our sources so that you can follow up on these seemingly astonishing (and sordid) tragedies. Enjoy!
Skunk of the Month…
Skunk of the Month is the designation made by Nonprofit Imperative, the organization dedicated to eliminating waste, fraud, abuse and mismanagement in nonprofits and government. The Skunk of the Month award is given to charities and government officials who show blatant disregard for the interests and trust of contributors and taxpayers. This month’s example is:
Update: In our last edition we shared with you the vagaries of Genesis Family Center and how the past chief executive violated her probation after pleading no contest and she was convicted of felony embezzlement and tax evasion. The county supervisors rejected a contract with the nonprofit citing questions about its troubled past. The county was its major donor. (ksee24.com) Update-2: The former executive director of the Genesis child welfare agency pleaded no contest to drunken driving and was given a jail sentence that runs concurrent with her violation of probation. (The Fresno Bee). Update-3: Upon being confronted by police the Genesis exec. directed an expletive-laced tirade at officers, ordering them off her property, according to the report. She also called a female officer a derogatory name, (The Fresno Bee).
This one has it all
He was elected speaker of the Florida House and then his house of cards started to collapse. Both he and his friend, the president of Northwest Florida State College face felony misconduct charges for allegedly misusing $6-million in state funds for a campus construction project. The speaker inserted the $6-million into the state budget in 2007 for what college officials had described as an emergency-management operations center. A grand jury believed that the money was to sublease a hangar adjacent to a private jet operation owned by a friend of the speaker and contributor, who has given millions of dollars to his and others campaigns. The newly elected speaker accepted an unadvertised $110,000-per-year job at the college. That position arose after the speaker had steered $35-million in construction funds to the college, according to The Miami Herald. When this broke the speaker stepped down as speaker and resigned his post at the college. The president of Northwest Florida since 1987 was also indicted for perjury for allegedly lying to jurors during his testimony on about plans for the building. (Chronicle of Higher Education). Northwest Florida College president is the "poster boy'' for abuse and "retired'' in 2007, collected a payment of $553,228 and started collecting a monthly pension of $8,803 to go with an annual salary of $228,000. (Tampabay.com) There is a call to the US Dept. of Ed & US Dept. of Justice to yank the accreditation of the College
Is a Third Strike an Out?
In order to provide nonprofits with retirement plans to their staff, Maricopa Community College District broke the law by misrepresenting at least 22 employees of non-profit organizations as district employees for years. The district paid their salaries and benefits and then accepted reimbursement. The audit of the college district marks the third time since 2006 that the state auditor has found that public entities misused public money by allowing non-profit organizations to get public-employee benefits. A 2006 audit of Santa Cruz County found the county improperly made loans to a non-profit corporation to cover the non-profit's payroll costs and allowed the employees to participate in the state retirement system. In 2007, state auditors found the Maricopa County Regional School District paid salaries and provided benefits to employees of a non-profit company.
Nonprofit News-
In Case You Missed It:
1. A mother and daughter who managed a D.C. government program aimed at employing blind vendors were indicted on charges of embezzling $281,000, much of which was supposed to be paid to the vendors, who were working at snack bars, cafeterias and gift shops in federal buildings. (Washington Post)
2. The Chief Financial Officer for Traveler’s Aid of Metropolitan Atlanta, a charitable organization that provides housing, support and assistance to homeless men, women and children in the Atlanta metropolitan area abused her position. She embezzled more than $164,000.00 of the charity’s funds and used that money for her own needs. (FBI Press Release)
3. An accounting director is expected to plead guilty to embezzling more than almost $600,000 from his former employers---American Society of International Law and the American Bakers Association. He is accused of embezzling about $445,000 from the law society and $145,000 from the bakers association. (washingtonexaminer.com)
4. In 2007, it’s believed she took $200,000 from a business, but no charges were filed. Now she is accused of embezzling more than $400,000 from the Hinton Economic Development Authority (OK) (newsok)
5. Using leads largely through the membership of the Church of Jesus Christ of Latter-day Saints in Lake Arrowhead, Terrance Tucker and Sonya Tucker are currently in custody for what federal prosecutors called a “mill scheme,” a scam that squeezed about $31 million from financial institutions and up to $2 million from individuals. A “mill” is a real-estate financing scheme in which they brokered real-estate loans by banks or other lenders, using fraudulent documents. (Mountain News)
6. The fired technology director for LifeGift Organ Donation Center pleaded guilty in Houston federal court to illegally accessing her employer’s computer and deleting files including organ donation database records. After being terminated, Danielle Duann, 51, repeatedly gained access to the LifeGift network and intentionally caused damage that cost the nonprofit Texas organ procurement group more than $94,000, officials said. A charity spokeswoman said the files were retrieved and no lives were put in jeopardy. (chron.com)
7. While posing as various charities --- including The Boys and Girls Club, Planned Parenthood, Teen Pregnancy Help Center, the YMCA, various domestic abuse shelters---the police investigated and arrested Norita Appleby. She will be charged with misappropriation of an Entity's Identifying Information, a class H felony. (wmtv.com)
8. A grand jury has indicted the Tucson Museum of Art's accountant with embezzling nearly $1 million. (examiner.com)
9. President Obama's budget for next year will include $50 million to help expand nonprofit programs across the country to promote national service
10. The Council on Foundations surveyed 430 foundations in March and found that 62 percent expect to reduce their grant making this year. Almost half of the respondents said they will decrease their giving budgets by more than 10 percent. (Chronicle of Philanthropy)
11. It appears that the Obama administration’s restrictions on lobbying are drawing criticism even as the administration defends the policies. The controversy surrounds two policy documents: one addresses restrictions on hiring lobbyists and others as political appointees, and the other focuses on communications by lobbyists about use of Recovery Act funds. (OMB Watch)
12. The IRS reminds small calendar year tax-exempt organizations to file their electronic Form 990-N, known as the "e-Postcard," by the May 15 deadline. To get more information about the annual electronic filing requirement for organizations whose annual gross receipts are normally $25,000 or less, go to IRS.gov.
13. Former Haven Humane Society CEO Norman Ray Ryan was convicted of five felonies in the embezzlement from the nonprofit group. (Redding.com)
14. A new study of the Bill and Melinda Gates Foundation illustrates its global reach with spending on health issues, but notes a need for accountability on whether the money is being spent in the most effective way.
15. The president and director of YouthBuild Pensacola Inc., was arrested on state charges of aggravated white-collar crime and organized fraud and theft of $65,000 mostly intended for small businesses participating in the program. He is a former executive director of the Gulf Coast African American Chamber of Commerce and former principal of the now-defunct Gulf Coast High School, which was a charter school. (pnj.com)
16. The Internal Revenue Service has added a detailed site map to its “Charities and Nonprofits” Web site to help visitors find what they are looking for. (Chron. Of Philanthropy)
We flagged these few examples of nonprofit mischief
1. St. Mary Magdalen Catholic Church (FL) $1 million (Orlando Sentinel)
2. Crow Creek Tribal School $6000 (S.D.) (Capital Journal)
3. Baldock Health Care Center in North Huntingdon, and Humbert Lane Nursing and Rehabilitation in Washington (PA) (Post Gazette)
4. Wellsville-Middleton School District (MO) $214,000 (wgem)
5. City of Springfield (MO) $750,000 (wgem)
6. Danville Harvest Jubilee (NC) $85,000 (Danville News)
7. Macon (GA) Waves $30,000 (macon.com)
8. University of St. Thomas (MN) $178,400 (bulletintoday)
9. Union Township (MI) unknown (themorningsun)
10. Options in Supported Living (CA) $225,000 (Sacramento Business Journal)
11. Central Maine Growth Council $29,000 (boston.com)
12. Christ Episcopal Church (VA) $300,000 (dailypress.com)
13. Association of Fish and Wildlife Agencies $180,000 (Washington Post)
14. Long Beach Unified School District/Long Beach Education Foundation $100,000 (mercurynews.com)
15. Memorial Christian Church thousands (wsls.com)
16. Colours $140,000 (courier-post)
17. Knights of Columbus (FL) $18,000 (news2.com)
18. A New Beginning (KS) $3.76 million (kake.com)
19. National Children's Alliance (MD) $15,800 (fox13now)
20. Coalition to End Family Violence (CA) $50,000 (Ventura County Star)
21. Tufts University (MA) $300,000 (The Tufts Daily)
22. Salford Township (PA) $95,000
23. Sioux Empire Fair (SD) $579,000 (ktiv.com)
24. Delaware Valley Regional High School District (NJ) $90,000 (AP)
25. Routt County Habitat for Humanity (CO) $75,000 (9news.com)
26. The Yuma Southwest Contractors Association (AZ) $15,000 (yumasun.com)
27. International Association of Machinists and Aerospace Workers District 9 (MO) $341,000 (St. Louis Business Journal)
28. Jubilee Restoration Inc (CA) $177,000 (cbs5.com)
29. The American Task Force on Palestine (VA) $107,000 (Washington Post)
*update
Political/public official chicanery (just a few):
1. A former political aide to Sen. Lindsey Graham (R-S.C.) will pay a civil penalty after embezzling hundreds of thousands of dollars from Graham's Senate campaign. In November 2008, Adams was sentenced to 18 months in prison and five years probation. She was also convicted of spending money from Graham's personal account. The campaign aide obtained a credit card in Graham's name sometime between 2006 and 2007. She had been convicted of fraud before. (The Hill)
2. The campaign manager for former Christopher Shays is being investigated by the Federal Election Commission, for significant financial irregularities. It is alleged that he quietly drained the account and had spent nearly $200,000 on Red Sox tickets, limousine travel, mysterious withdrawals at a casino and a donation of more than $1,000 to his synagogue. Mr. Shays said, “To lose an election is difficult; what happened since then is unimaginable.”
3. A former Okaloosa County (FL) Sheriff and former Okaloosa County Sheriff’s Office Director were indicted creating fictitious bonuses to sheriff’s department employees. The indictment alleges that Sheriff’s Office employees were directed to return all or a portion of the bonuses in the form of cash and cashier’s checks under the pretense that these returned funds were to be used for charitable purposes. (U.S. Attorney Press Release)
4. New York City’s longtime finance commissioner, Martha E. Stark, resigned amid a series of official inquiries. Ms. Stark faced new disclosures that she had been paid more than $134,000 in 2006 and 2007 for service as a board member of the Tarragon Corporation, a large housing builder and property owner not doing business in the city, a level of outside activity generally frowned upon by city regulations. Previously, it was reported that Ms. Stark was romantically involved with a former subordinate whose salary had risen sharply during the last three years she worked for the agency. She had decided to retain the husband of her first deputy commissioner as a parking ticket judge even though city investigators had found discrepancies in the time sheets submitted by the husband.
5. Two longtime supervisors at the Canyon County (WY) Division of Motor Vehicles are facing felony charges of grand theft of “a large” amount of money. (Localnews8.com)
6. They do not show up on staff rosters and touted belt-tightening, the California House and Senate leadership hired friends and close confidants to positions that totaled nearly a half a million dollars. (Sacramento Bee)
7. The chairman of the Federal Reserve Bank of New York resigned after questions were raised about his role as a director of Goldman Sachs and his purchases of stock in the company. This was after Goldman came under direct supervision of the New York Fed. He is representative of the too-cozy relationship between the New York Fed, which serves as the central bank's eyes and ears on Wall Street, and the bankers it oversees, critics say. (Washington Post)
8. Prosecutors are alleging that a 74-year-old spent $60,000 in public funds for personal use before retiring as Vernon (CA) city administrator five years ago. He reported a salary of more than $600,000 that had made him one of the state's highest paid city officials. (signonsandiego.com)
9. Former New York state senator has pleaded guilty to fraud charges, admitting that he used charity groups to steal hundreds of thousands of dollars. Efrain Gonzalez admitted that he siphoned the money away from charity groups that received state grants from $200 million the New York Legislature. (NYT) His gal friend admitted her role in Gonzalez's theft of $200,000 in public money, but as part of a plea deal with the feds, she faces a likely sentence of between four and 10 months in prison. (daily news)
10. Former Fresno (CA) County Deputy Coroner Joseph Tiger was sentenced to 18 months in jail and 5 years of probation, after pleading guilty to embezzlement charges. Tiger was accused of stealing from the dead. (ksee.com)
11. A former Water Operations Supervisor for the City of Sonoma, Calif., pleaded guilty to personally receiving financial payments from a parts vendor with whom he had arranged contracts for the City.
12. A Macomb County (MI) postal worker is charged with stealing more than $19,000 in stamps and selling them for discount online to help pay his mortgage was arraigned. (freep.com)
What do you think??? : gary.r.snyder@gmail.com
Don’t miss Gary Snyder’s latest contribution to the National Committee on Responsive Philanthropy website (ncrp.org)
Nonprofit Imperative gathers its information solely from public documents...some of which are directly quoted. Virtually all cited are in some phase criminal proceedings; some have not been charged, however.
Recent (cites) Comings and Goings:
• Funding Incompetence (ncrp.org)
• An Assault on Charities (ncrp.org)
• Nonprofit Hospitals Chase Debt (The Sun News)
• Is CEO Pay at Angel Food Ministries Excessive? (Atlanta Journal
Constitution)
• Five Rivers Outcome a Travesty (The Sun News)
• Where’s the Ire? (ncrp.org)
• A rags-to-riches life, with painful detours (Atlanta Journal Constitution)
• Five Rivers leaders guilty on six counts (The Sun News)
• Angel Food chief has led up-and-down life (Atlanta Journal Constitution)
• The Best Charitable Watchdog Going Kaput (ncrp.org)
• Five Rivers leaders guilty on six counts (The Sun News)
• Angel Food chief has led up-and-down life (Atlanta Journal Constitution)
• Our Students Deserve Better (ncrp.org)
• National Religious Broadcasters March 7,2009
• Siphoning Off Sacred Funds (ncrp.org)
• The Accountants and Regulators Role in the Current Collapse (ncrp.org)
• Veterans Whine as Executives Dine (ncrp.org)
• Government agency Monitoring: Indifference and Hush (ncrp.org)
• The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), Ethics World, Aspen Philanthropy Newsletter, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, Board Room Insider, USA Today Topics, Newsweek.com, Responsive Philanthropy Magazine, New York Times, Portfolio Magazine, The Virgin Islands Daily News, NANKAI (China) BUSINESS REVIEW, National Religious Broadcasters newsletter, The Charity Governance Blog, Palm Beach Post, Detroit Free Press, Oakland Press, Nonprofit World, Socially Responsible Business Forum, PNNOnline, Ohio Nonprofit Resources, Nonprofit Good Practice Guide, Nonprofit Startup Guide, National Coalition of Homeless Newsletter, The Michigan Nonprofit Management Manual, MichiganNonprofit.com, CORP! Magazine, Crain’s Michigan Nonprofit, ncrp.org,
• Nonprofits: On the Brink (iUniverse, 2006)
Our intent is to keep you informed.... You may send an e-mail that will remove you from our contact list and future mailings by emailing to nonprofitsonthebrink@gmail.com with the word "remove" in the subject line.
Email: gary.r.snyder@gmail.com
6584 Pleasant Lake Court, West Bloomfield, Michigan 48322, 248/324-3700
Website: www.garyrsnyder.com
Gary Snyder is the author of Nonprofits: On the Brink (iUniverse, February, 2006) and articles in numerous publications. The book can be bought at amazon.com, barnesandnoble.com, Barnes and Noble (store) and iUniverse.com (publisher).
© Gary R. Snyder, All Rights Reserved, 2009
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